Chapter One Marketing Creating and Capturing Customer Value

							Chapter Seventeen
Direct and Online Marketing
B2210: Introduction to Marketing Tactics




FACULTY OF BUSINESS ADMINISTRATION
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Direct and Online Marketing:
Building Direct Customer Relationships
                               Objectives
• Define direct marketing and discuss its benefits to customers
  and companies.
• Identify and discuss the major forms of direct marketing.
• Explain how companies have responded to the Internet and
  other powerful new technologies with online marketing
  strategies.
• Discuss how companies go about conducting online
  marketing to profitably deliver more value to customers.
• Overview the public policy and ethical issues presented by
  direct marketing.

FACULTY OF BUSINESS ADMINISTRATION             WWW.BUSINESS.MUN .CA
The New Direct Marketing
Model

  Direct marketing is:
  • A marketing channel
    without intermediaries
  • An element of the
    promotion mix
  • Fastest-growing form of
    marketing


FACULTY OF BUSINESS ADMINISTRATION   WWW.BUSINESS.MUN .CA
Growth and Benefits of Direct
Marketing
          Benefits to Buyers
• Convenience
• Ready access to many products
• Access to comparative information about
  companies, products, and competitors
• Interactive and immediate




FACULTY OF BUSINESS ADMINISTRATION     WWW.BUSINESS.MUN .CA
Growth and Benefits of Direct
Marketing
          Benefits to Sellers
• Tool to build customer relationships
• Low-cost, efficient, fast alternative to reach
  markets
• Flexible
• Access to buyers not reachable through other
  channels




FACULTY OF BUSINESS ADMINISTRATION       WWW.BUSINESS.MUN .CA
Customer Databases and
Direct Marketing
          Customer Database
Customer database:
An organized collection of
comprehensive data
about individual
customers or prospects,
including geographic,
demographic,
psychographic, and
behavioural data
FACULTY OF BUSINESS ADMINISTRATION   WWW.BUSINESS.MUN .CA
Forms of Direct Marketing




FACULTY OF BUSINESS ADMINISTRATION   WWW.BUSINESS.MUN .CA
Forms of Direct Marketing
                     Direct-Mail Marketing
Direct-mail marketing: An offer, announcement,
reminder, or other item to a person at a particular
address
     Personalized
     Easy-to-measure results
     Costs more than mass media
     Provides better results than mass media
     Can take the form of voice mail, text
       messaging, e-mail or snail mail.
FACULTY OF BUSINESS ADMINISTRATION           WWW.BUSINESS.MUN .CA
Forms of Direct Marketing
                 Catalogue Direct Marketing
 Catalogue direct marketing: Printed and web-
 based catalogues
 Web-based catalogues:
   Benefits:                         Challenges:
    Lower cost than printed          Require marketing
     catalogues                       Difficulties in attracting
    Unlimited amount of               new customers
     merchandise
    Real-time merchandising
    Interactive content
    Promotional features
FACULTY OF BUSINESS ADMINISTRATION                 WWW.BUSINESS.MUN .CA
Forms of Direct Marketing
                Telephone Direct Marketing
Telephone direct marketing: Using the
telephone to sell directly to consumers and business
customers
     Outbound telephone marketing sells directly
       to consumers and businesses
     Inbound telephone marketing uses toll-free
       numbers to receive orders from television and
       print ads, direct mail, and catalogues


FACULTY OF BUSINESS ADMINISTRATION      WWW.BUSINESS.MUN .CA
Forms of Direct Marketing
Direct-Response Television and Kiosk Marketing
  Direct-response television (DRTV)
  marketing: 60- to 120-second ads that
  describe products and give customers a toll-free
  number or Web site to purchase as well as 30-
  minute infomercials such as home shopping
  channels
  Kiosk marketing: Placing information on
  machines in public areas such as in stores,
  airports, and other locations
FACULTY OF BUSINESS ADMINISTRATION     WWW.BUSINESS.MUN .CA
Forms of Direct Marketing
                    Digital Direct Marketing
  Digital direct marketing
  technologies
     Mobile phone marketing
     Podcasts
     Vodcasts
     Interactive TV




FACULTY OF BUSINESS ADMINISTRATION         WWW.BUSINESS.MUN .CA
Forms of Direct Marketing
                    Digital Direct Marketing
Mobile phone marketing:
     Ring-tone giveaways
     Mobile games
     Ad-supported content
     Contests and sweepstakes




FACULTY OF BUSINESS ADMINISTRATION         WWW.BUSINESS.MUN .CA
Forms of Direct Marketing
                    Digital Direct Marketing
Podcasts and vodcast: The downloading of
audio and video files via the Internet to a handheld
device such as a PDA or iPod and listening to them
at the consumer’s convenience
Interactive TV (ITV) lets viewers interact with
television programming and advertising using their
remote controls and provides marketers with an
interactive and involving means to reach targeted
audiences

FACULTY OF BUSINESS ADMINISTRATION         WWW.BUSINESS.MUN .CA
Online Marketing
                 Marketing and the Internet
Online marketing: Market products and services
and build customer relationships over the internet
Online companies: The dot-coms, which
operate only online without any brick-and-mortar
market presence
Hybrid (Click-and-Mortar) Companies:
Traditional companies that have added online
marketing to their operations

FACULTY OF BUSINESS ADMINISTRATION       WWW.BUSINESS.MUN .CA
Online Marketing
                 Online Marketing Domains




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Online Marketing
               Setting Up an Online Presence




FACULTY OF BUSINESS ADMINISTRATION      WWW.BUSINESS.MUN .CA
Online Marketing
               Designing Effective Web Sites
To attract visitors, companies must:
   Promote an offline promotion and online links
   Create value and excitement
   Constantly update the site
   Make the site useful




FACULTY OF BUSINESS ADMINISTRATION      WWW.BUSINESS.MUN .CA
Online Marketing
       Designing Effective Web Sites - The Seven C’s

           Context                   Content   Community




      Customization          Communication      Connection




                                Commerce



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Online Marketing
          Placing Ads and Promotions Online
• Online advertising: Advertising that appears while
    consumers are surfing the Web, including display ads, search-
    related ads, online classifieds, and other forms
•   Banners: Banner-shaped ads found on a Web site
•   Interstitials: Ads that appear between screen changes
•   Pop-ups: Ads that suddenly appear in a new window in front
    of the window being viewed
•   Rich media ads: Incorporate animation, video, sound, and
    interactivity
•   Search-related ads: Ads in which text-based ads and links
    appear alongside search engine results on sites such as Google
FACULTY OF BUSINESS ADMINISTRATION               WWW.BUSINESS.MUN .CA
Online Marketing
          Placing Ads and Promotions Online
Other forms of online promotion include:




FACULTY OF BUSINESS ADMINISTRATION     WWW.BUSINESS.MUN .CA
Online Marketing
      Creating or Participating in Social Networks
                  (Web Communities)
 Social Networks: Allow members to congregate
 online and exchange views on issues of common
 interest
      Facebook
      Twitter
      MySpace




FACULTY OF BUSINESS ADMINISTRATION      WWW.BUSINESS.MUN .CA
Online Marketing
                             Using E-mail
E-mail
Marketers are developing “enriched” messages that
  include animation, interactivity, and personal
  messages with streaming audio and video to
  compete with the cluttered e-mail environment
     Spam: Unsolicited, unwanted commercial e-mail
      messages
     Permission-based marketing: Allows users to opt in or
      opt out of e-mail marketing

FACULTY OF BUSINESS ADMINISTRATION             WWW.BUSINESS.MUN .CA
Online Marketing
    The Promise and Challenges of Online Marketing
  Online marketing will remain an important
  approach in the marketing mix to:
       Build customer relationships
       Improve sales
       Communicate company and product
        information
       Deliver products and services more effectively
        and efficiently


FACULTY OF BUSINESS ADMINISTRATION        WWW.BUSINESS.MUN .CA
Public Policy Issues in Direct
Marketing
 Irritation, Unfairness, Deception, and Fraud
 • Irritation: Annoying and offending customers

 • Unfairness: Taking unfair advantage of impulsive
   or less-sophisticated buyers

 • Deception: “Heat merchants” who design mailers
   and write copy designed to mislead consumers

 • Internet fraud: Identity theft and financial scams


FACULTY OF BUSINESS ADMINISTRATION         WWW.BUSINESS.MUN .CA
Public Policy Issues in Direct
Marketing
           Invasion of Privacy
 Privacy Issues:
 • Companies keep extensive databases about
   online customers demographics and behaviours
 • The concern is that marketers may know too
   much about consumers and use this information
   to take unfair advantage of unknowing
   customers


FACULTY OF BUSINESS ADMINISTRATION    WWW.BUSINESS.MUN .CA
Public Policy Issues in Direct
Marketing
           A Need for Action
   PIPEDA (The Personal Information Protection and
   Electronic Documents Act) is based on four
   principles:
   1. Consumer knowledge and consent
   2. Limitations
   3. Accuracy
   4. Right to access


FACULTY OF BUSINESS ADMINISTRATION       WWW.BUSINESS.MUN .CA